Business transactions, especially large transactions or transactions between parties new to one another, typically involved face-to-face interaction in order to initiate familiarity and open and honest communication. The advent of the Internet, however, has allowed parties to conduct business transactions without the assurances that accompany personal interaction. Thus, although businesses have greatly benefited from the lower costs and access to larger markets associated with electronic commerce (“e-Commerce”) transactions over the Internet and World Wide Web, certain risks and obstacles are associated with such e-Commerce transactions. For example, uncertainty over the identity of a trading counterpart can create an obstacle to successfully completing a transaction, particularly large transactions involving a sizeable commitment of resources. In addition, the inability to accurately verify the financial viability of a trading counterpart can lead to wasted resources and lost profits due to a counterpart's financial inability to complete a transaction. The inability to verify a trading counterpart's identity or financial ability to enter into and complete a transaction can also make it easier for a party to misrepresent itself, and even commit fraud.
Patents that disclose methods for conducting an online business transaction are known. For example, U.S. Pat. Nos. 5,267,314 and 5,659,616, both of which are incorporated herein by reference, disclose such methods. U.S. Pat. No. 5,267,314 discloses a method and system for authenticating parties using encryption technology. U.S. Pat. No. 5,659,616 discloses a method for authenticating parties using digital signatures. These methods, however, do not disclose the use of a joint venture or business information provider or the verification of a trading counterpart's identity and financial ability to enter into an online marketplace transaction. Furthermore, the benefit of previously disclosed methods is limited due to uncertainty surrounding the identity and financial viability of trading counterparts. As such, the instant invention provides identity insurance products guaranteeing a trading counterpart's identity and financial ability to enter into an online marketplace transaction.
The risks and obstacles associated with conducting e-Commerce transactions are particularly keen for business-to-business trading marketplaces or brokering websites available on the Internet or World Wide Web. Such marketplaces and websites often involve a large number of parties, thus intensifying the risks associated with not being able to verify the identity of a party or its financial ability to complete a transaction. Indeed, these risks often prevent parties from participating in such marketplaces or from making large online purchases or sales, thus resulting in lost revenue and profits.
These deficiencies are overcome by the novel methods and system for providing information about the identity and financial viability of trading counterparts and users in an online, trading marketplace. Users of the instant invention can be any party to a business transaction, such as, buyers, sellers and third parties, such as, online marketplaces. In accordance with the present invention, a seller can register with an online marketplace by submitting information about itself to a Joint Venture Authority (“JV Authority”). The JV Authority can be a business information provider, such as, a provider of business, financial and/or quality assurance information, and/or a joint venture between an insurance underwriter and a business information provider. The business information provider can be, for example, Dun & Bradstreet, and preferably furnishes identity and financial information regarding a trading counterpart or user, such as, contact information, financial risk assessment, financial viability, creditworthiness, credit score, and profitability. The insurance underwriter can supply information regarding a trading counterpart's or user's insurance coverage. The business information provider can also be a provider of quality assurance information, such as, without limitation, Bureau Veritas, Intertek Testing Services, and/or SGSon SITE.
The JV Authority can process information submitted by a user in conjunction with information provided by a business information provider in order to verify the identity and/or financial viability of a trading counterpart or user. Once the identity of a user is verified, the JV Authority sends information regarding the verified user to a Registration Authority that can register the verified user and request security credentials or a unique identifier, such as, a digital certificate, from a Credential Issuing Authority. Security credentials can also include a roaming security credential, roaming unique identifier or roaming digital certificate, that can be downloaded and temporarily stored on any computer being used by a user in order to verify its identity and facilitate subsequent interaction with trading counterparts in an online marketplace. Alternatively, the Credential Issuing Authority can generate a password or other unique identifier for a verified user in order to facilitate subsequent interaction with trading counterparts. In accordance with the instant invention, the JV Authority, Registration Authority and Credential Issuing Authority can all comprise a single entity.
Once the identity of a buyer, seller or marketplace is verified and its security credentials established and evinced by, for example, assignment of a digital certificate, the security credentials can be exchanged among users so that trading counterparts can have proof of one another's identities. The security credential or digital certificate exchanged among users can be processed by the Joint Venture Authority and/or Credential Issuing Authority databases in order to perform identity verification. The JV Authority can also perform authorization assessments to determine whether a buyer, seller or marketplace is financially able, or authorized, to complete a transaction. Such authorization assessments can be based on a variety of financial information and/or data including, creditworthiness, profitability and liability limits and on transaction-related information such as the nature, type, monetary amount and size of the transaction. Alternatively, the authorization assessment of a trading counterpart can be provided to a user without revealing the identity of its trading counterpart.
The instant invention also provides a financial product and method for using insurance to provide assurance, e.g., financial assurance, of the identity of a trading counterpart or customer and the ability of such counterpart or customer to complete a transaction. More specifically, the present invention relates to a financial product, such as an identity insurance policy, and a method for determining the premium of the financial product.
The inventive system and method ensures a safe, widely accessible and profitable online, trading marketplace through the functions of identity verification, identity insurance product offerings, and financial authorization, or viability, assessment. The invention described herein provides all of these functions in a single integrated package while being implemented through the Internet and preferably in real time.